Stocks were mixed Thursday, with the Nasdaq and the S&P 500 hitting fresh intraday highs, as investors reacted to a dovish Federal Reserve policy statement following its widely signaled tapering decision.
The Dow Jones Industrial Average was down 128 points, or 0.36%, to 36,028, while the S&P 500 was up 0.23% and the Nasdaq advanced 0.8%.
The Federal Reserve said Wednesday it would begin slowing the pace of its $120 billion in monthly bond purchases later this month, but it made no mention of linking the so-called taper to future rate hikes.
The Fed will taper $15 billion from the monthly pace, with reductions in Treasury bond purchases of $10 billion and a $5 billion cutback in purchases of mortgage-backed securities.
“Ideally, we would see further development of the labor market in a context where there isn’t another Covid spike,” Chairman Jerome Powell told reporters in Washington. “We don’t think it is time yet to raise interest rates.”
Louis Navellier, chief investment officer at Navellier & Associates, said “it is very apparent to me that Fed Chairman Jerome Powell wants his job renewed by President Biden and will strive to not rock the boat by keeping monetary policy super accommodative.”
Weekly jobless claims totaled 269,000 last week, the lowest pandemic-era total and better than the 275,000 estimate.
“So far this week we’ve gotten pretty good news on the labor market front — with private payrolls getting a boost and jobless claims ticking down for yet another week,” said Mike Loewengart, managing director of investment strategy with E-Trade.
“And with the Fed starting to take a step back from their accommodative stance, in aggregate this could stand as another proof point of solid gains when it comes our economic recovery.”
Powell said he wanted to see more robust jobs progress, Loewengart said, “so all eyes will be on the full employment picture tomorrow and how that will translate to the Fed’s actions going forward.”
In company news, Qualcomm shares surged after the chipmaker, which is a key Apple supplier, blasted fourth-quarter earnings estimates and issued a robust holiday-quarter forecast.
Moderna tumbled after posting weaker-than-expected third-quarter earnings and cutting its full-year forecast for Covid vaccine sales.
Nikola shares jumped after the electric-truck maker said it could settle fraud charges levied by the Securities and Exchange Commission for around $125 million.
This article was originally published by TheStreet.